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Tax Planning/improvements to home office


I own an internet retail business run 100% out of my house. We moved in to our current house in 2009 and have taken the appropriate home office deductions each year, including depreciation.

We just realized that the cost of $600,000 (including $200,000 land) that we've been reporting was the purchase price only, and we did not count the significant costs of the entire house being painted inside and out, nor completely refloored, before we moved in.

In order to capture these expenses is our only option to file amended returns for all prior years, adding the painting and flooring to the original cost?


It depends on when you placed your home in service.  The rules state that you depreciate the improvements upon being placed in service but at either the original purchase price (plus improvements) or the FMV as of the date of first use, whichever is lower.  If you make improvements AFTER the date being placed in service, it becomes another capitalized item to be depreciated,

Hope this helps.  

Tax Planning

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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